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Finance

Real Madrid posts profit despite COVID-19 challenges

Featured image credit: Vienna Reyes on Unsplash

Spanish LaLiga football club Real Madrid has posted an operating income for the financial year ending June 30, 2022 of €721.5m (£626m/$734m), an increase of €69m on the previous year, although match-day revenue was limited due to the ongoing redevelopment of the Estadio Santiago Bernabéu.

Real’s EBITDA (earnings before interest, taxes, depreciation and amortisation) for 2021-22 was €203m, compared to €179.6m in 2020-21 and €177m in 2019-20. The club’s net worth also rose from €533.7m to €546.4m.

A profit of €12.9m has been announced, up from the €874,000 profit the club posted in 2020-21 and €313,000 in 2019-20. Real said it is “one of the few big clubs in Europe” that did not incur losses during the two years of the pandemic but added that the loss of revenue caused by COVID-19 since March 2020 is €400m.

Although Real said that the economic impact of the pandemic is gradually subsiding, the impacts still persist, with the club noting that its revenue figure for the 2021-22 financial year is still lower than the amount reached four years ago in 2017-18, and €100m lower than in 2019-20.

The ongoing redevelopment of the Bernabéu meant that the stadium could not operate at full capacity last season, which impacted the club’s match-day revenue. Real said that its management is continuing to focus on cost containment and on actions to improve management and business development in all areas, highlighted by the club’s recent partnership with Sixth Street/Legends.

Earlier this year, Real Madrid sealed a €360m deal with global investment firm Sixth Street and premium experiences company Legends, which will lead to the formation of a new entity aimed at enhancing the non-football activities at the revamped Bernabéu.

The objective of the deal is to elevate the Bernabéu as a “unique venue and a worldwide benchmark” for leisure and entertainment. Real said the funds it receives can be invested across any of its activities, with Sixth Street acquiring the right to participate in the operation of certain new businesses of the Bernabéu for a 20-year period.

Real invested €279.2m in the Bernabéu project in 2020-21, with this figure rising to €537.8m in 2021-22. An arranged loan of €800m is now in place for the project.

The club is projecting revenue of €769.6m in 2022-23, before the disposal of fixed assets, as well as profit before taxes of €5m.

Last month, Real released a drone video showcasing the Bernabéu redevelopment, with the wide-ranging project scheduled to be completed next year.

The video interspersed real-time footage of the ongoing construction work with rendering imagery of what the stadium will look like when completed. One of the main elements of the project is the installation of a retractable pitch system to ensure the stadium can fulfil more of a multi-purpose remit.